KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
China’s property crisis shows no signs of easing as at least 48 million homes remain unfinished, posing a significant threat to the country’s real estate sector, according to a report from Bloomberg Intelligence.
Key Highlights:
Unfinished Homes Crisis: The staggering number of 48 million unfinished homes in China exceeds Germany’s entire housing stock as of 2021. This situation threatens developers’ revenues, as buyers may increasingly avoid purchasing pre-sale properties and opt for completed or second-hand homes instead.
Struggling Property Sector: Despite a government rescue package that includes a 300 billion yuan (US$42 billion) relending program, China’s property sector continues to face severe challenges. Residential sales of new homes plummeted by 19.7% in July, reflecting the ongoing strain on the market.
Labor Shortage Compounds Problems: An ageing workforce is exacerbating the crisis. The average age of migrant construction workers rose to 43 in 2023, up from 38 in 2014, with those over 50 now comprising 31% of the labor force. Meanwhile, the proportion of workers under 30 has halved, partly due to low wages that fall below the national average.
Construction Worker Decline: The correlation between home completions and the number of construction workers is evident, with the workforce peaking at 61 million in 2014 and declining by 25% since. Home completion shortfalls amounted to 8.4 billion square meters (90 billion square feet) for sales from 2000 through the first half of 2024, representing 38% of the cumulative total.
Shift in Buyer Preferences: A significant shift in buyer behavior is emerging, with existing-home sales surpassing new home sales by area for the first time in 2023. Completed homes now account for 27% of new sales in the first half of 2024, a sharp rise from 10% in 2021.
Outlook: The vast number of unfinished homes in China signals deep-rooted challenges in the property sector, with a potential long-term impact on developers, buyers, and the overall economy. As buyer preferences shift and labor shortages continue, the path to recovery for China’s real estate market remains uncertain.
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